How to become a billionaire
1st Jan 2015 Life
There are more extraordinarily wealthy individuals than ever before—and their similarities are surprising. So what's their secret?
Why are there so many billionaires?
Facebook billionaire Mark Zuckerberg. Image via Frederic Legrand COMEO / Shutterstock.com
As recently as the 1990s, millionaire status still meant unimaginable wealth—but that’s all changed. Today, it’s all about the billionaire. In the past two decades, there’s been more than a 1,000 percent increase in those with a billion to their name. But why? And, more importantly, how?
“There are two economic factors that produce more billionaires,” says Sam Wilkin, author of Wealth Secrets: How the Rich Got Rich. “First, inflation. A billion dollars today is, in value, equivalent to ‘only’ about $550 million 25 years ago.
“Second, global economic growth. There’s more money in the world today, so there are more billionaires. However, total inflation over the past 25 years was about 82 percent, and yet the number of billionaires increased from 99 in 1990 to 1,826 in 2015, which is a 1,744 percent increase. So it seems that something else happened.”
Pinpointing that elusive “something else” is no easy task (if it were, we’d all be rolling in it). And yet, take a look at today’s richest and some interesting parallels do come to light—and they aren’t necessary what you’d imagine.
So all those wanting to join the rich list, take note: here are some pointers you might want to consider.
University isn’t a necessity
Sir Richard Branson is worth £4.5bn. Image via Prometheus72 / Shutterstock.com
If you’ve ever attributed your lack of billionaire status to the fact you never made it to the hallowed halls of Oxbridge, you needn’t worry. While it’s true that Facebook founder Mark Zuckerberg’s social network site originated from Harvard, many billionaires never made it to further education—and some didn’t even complete A Levels.
Virgin media founder Sir Richard Branson, for instance, was dyslexic and left school at 15. He launched Virgin Mail Order at 20, a business through which he sold discounted records by post. According to this year’s Sunday Times Rich List, he’s now worth a cool £4.5bn.
"Sir Richard Branson was dyslexic and left school at 15"
Still not convinced? Take John Cauldwell. He left school before his A Levels to work as an apprentice in a tyre factory and later found employment as a car salesman. In 1987, he turned his attention to mobile phones and set up the wholesaler Midland Mobile Phones with his brother Brian. This later became Phones4U—and he’s now worth £1.5bn.
Other billionaires who vetoed university include Lord Alan Sugar (£1.2bn), Laurence Graff (£3.2bn) and Roman Abramovich (£6.4bn).
Come up with a simple idea
James Dyson is worth around £5bn. Image via Forbes
Not everyone has to be like Ellis Short, the founder of private-equity fund Kildare Partners, which invests in distressed property assets across Europe and has accrued approximately £1.2bn. Some people can just get really fed up with their Hoover and have an idea for a new one—like Sir James Dyson.
Dyson was irritated by how often his Hoover dust bag got blocked and decided to design a new vacuum cleaner that negated the need for a bag entirely. Sadly, though, the UK wasn’t interested. Indeed, not one manufacturer would touch it because of fears it would diminish the dust-bag market. So he took it to Japan.
It was ten years before Dyson broke into the UK market. But when he did, his Dyson Dual Cyclone became the fastest-selling vacuum cleaner in the country. This invention then duly led to others: the Dyson Airblade hand dryer, for instance, and more recently, the Dyson Supersonic hair dryer. Dyson himself is today worth around £5bn—all from that very simple idea of making something already available better.
Look to technology
The founders of Uber are now worth around £4.7bn each. Image via Syafiq Adnan / Shutterstock.com
If you’re good with simple ideas, but conversely have no idea where to start, turn your attention to tech. As Sam Wilkin points out, “One-quarter of the 20 largest fortunes in the world are from a single economic sector—the technology sector.” This, of course, includes the world’s richest man, Bill Gates.
“The economics of these businesses cause them to become monopolies—where one firm dominates the entire sector—meaning they produce a lot of great fortunes,” continues Sam. “Microsoft had close to a 90 percent share of personal computer operating systems; Amazon has close to a 60 percent share of electronic books; Google has roughly a 60 percent share of internet search; Facebook has an 80 to 90 percent share of social media log-ins in many European countries.”
We don’t need telling twice, and we only need read about Evan Spiegel to be further convinced. He left Stanford University to found the hugely popular instant messaging mobile app Snapchat in 2011—and at just 26 years old, he’s now worth a reported £2bn.
“One-quarter of the 20 largest fortunes in the world are from the technology sector”
Once you’ve got your simple tech idea, you must then get yourself down to the US’s Silicon Valley. From 2014–15 it was home to 23 new billionaires, so you’ll be in good company. Travis Kalanick and Garrett Camp, for example, founded a taxi app there. They named it Uber and are now worth around £4.7bn—each.
However, if you’re not an ideas person, don’t panic. Just make sure you know a good idea when you see one. David Ross was asked by his school friend Charles Dunstone to join the mobile-phone business Dunstone had set up from his London flat using a mere £6,000 of savings. The business was called Carphone Warehouse and Sir Charles Dunstone is now worth an estimated £1.3bn. And while Ross’s fortune comes up just shy of the coveted sum—at circa £923m—it’s certainly not a fortune
to be sniffed at.
Read more: What does Google know about you?
Move to a region that suits your skill-set
River Island is now worth £1.5bn. Image via Martin Good / Shutterstock.com
Certain regions are more likely to produce certain types of billionaire so it’s important you’re in the right place to make the most of your idea. The Billionaires Report from UBS/PwC, entitled Master Architects of Great Wealth and Lasting Legacies (published in May last year), uncovered that financial and technology mega fortunes are most often made in the US, whereas in Asia it was the consumer and real-estate industries that produced the most billionaires.
Similarly, in Europe, the consumer industry—such as the fashion and beverage sectors—tends to be where billionaire wealth lies. Ninety-year-old Londoner Bernard Lewis, for instance, founded a clothes shop called Lewis Separates with his three brothers in 1948. It later became River Island, and he and his family are now worth £1.5bn.
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